[Federal Register Volume 62, Number 226 (Monday, November 24, 1997)]
[Rules and Regulations]
[Pages 62495-62504]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-30428]
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Rules and Regulations
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Federal Register / Vol. 62, No. 226 / Monday, November 24, 1997 /
Rules and Regulations
[[Page 62495]]
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OFFICE OF PERSONNEL MANAGEMENT
5 CFR Parts 351, 430, and 531
RIN 3206-AH32
Reduction in Force and Performance Management
AGENCY: Office of Personnel Management.
ACTION: Final rule.
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SUMMARY: The Office of Personnel Management (OPM) is issuing final
regulations that enhance the opportunity for Federal employees to
receive reduction in force retention service credit based on their
actual job performance. The regulations also give agencies with
employees who have been rated under different patterns of summary
rating levels a mechanism to take this into account when providing
employees additional retention service credit for reduction in force.
These regulations also clarify certain other retention rights,
including the coverage of employees serving under term appointments.
DATES: Effective date: December 24, 1997. Compliance dates: Subject to
the requirements of 5 U.S.C. 7116(a)(7), agencies may implement revised
Secs. 351.504 and 351.803(a), at any time between December 24, 1997 and
October 1, 1998. For reduction in force actions effective between
December 24, 1997 and September 30, 1998, agencies may use either
Secs. 351.504 and 351.803(a) effective December 24, 1997 or the prior
Secs. 351.504 and 351.803(a) in 5 CFR part 351 (January 1, 1997,
edition).
FOR FURTHER INFORMATION CONTACT: Thomas A. Glennon, Jacqueline Yeatman,
or Edward P. McHugh (part 351); (202) 606-0960, FAX (202) 606-2329; or
Barbara Colchao or Doris Hausser (parts 430 and 531); (202) 606-2720,
FAX (202) 606-2395.
SUPPLEMENTARY INFORMATION: On February 4, 1997, OPM issued proposed
regulations concerning reduction in force and performance management.
These proposed changes were designed to enhance the opportunity for
Federal employees to receive reduction in force retention credit based
on their actual job performance. They proposed changes to the crediting
procedures used when employees are missing performance ratings, as well
as giving agencies the authority to vary performance credit in
reduction in force to take into account ratings given under different
summary level patterns.
We received comments from 21 agencies, 4 unions, and 3 individuals.
Not every commenter mentioned every proposed provision. The key changes
OPM proposed in the regulations are summarized below, along with a
summary of the comments received on that particular proposal.
Providing Retention Service Credit When Employees in the Same Reduction
in Force Competitive Area Have Been Rated Under More Than One Pattern
of Summary Rating Levels
On August 23, 1995, OPM issued final regulations, at 60 FR 43936,
giving agencies the option to determine which of eight permissible
patterns of summary rating levels to use for their performance
appraisal programs. As a result, changes in the crediting of
performance in reduction in force were necessary because this
flexibility in the design of performance appraisal programs can affect
employees' relative retention standing for reduction in force. The
proposed regulations revised 5 CFR 351.504 to require an agency to take
into account different patterns of summary rating levels when providing
employees additional retention service credit in reduction in force
competition based on their performance.
Under the proposed regulations, an agency with employees in a
reduction in force competitive area who have been rated under different
patterns of summary rating levels must decide how many years of
retention service credit within the allowable range of 12 to 20 years
to assign to particular summary rating levels in their patterns. The
specific method selected by the agency to provide retention service
credit for performance will of necessity be specific to the reduction
in force competitive area as the agency takes into account the
combination of rating patterns used and the relative numbers of
employees rated under each pattern.
If an agency has reduction in force competitive areas in which all
employee ratings of record to be credited were given under the same
pattern of summary levels, it is required to follow the current
regulations for crediting performance in a reduction in force which now
appear in paragraph (d) of section 351.504.
In applying the proposed regulations, agencies must treat employees
within the reduction in force competitive area in a uniform and
consistent manner. An agency carrying out a reduction in force may
provide different amounts of additional retention service credit for
ratings of record received in an employee's former agency than were
provided by that former organization.
The majority of comments received on this proposal were very
positive. Most of those who commented felt it was a necessary and
logical outgrowth of performance rating flexibility that would be
helpful to both agencies and employees. This proposal was especially
well-received by those considering, or already using, alternative
performance appraisal programs such as a 2-level (``Pass/Fail'')
program. Some agencies requested even greater flexibility to address
what they see as potential inequities when employees in different
competitive areas are rated under different appraisal programs, even if
there is no inconsistency within each competitive area. This was deemed
especially crucial to agencies having various offices or components
using different summary rating patterns.
One commenter voiced the concern that employees rated as ``Fully
Successful'' under a two-level program could actually be performing at
very different levels. Another suggested that the proposal be modified
in order to prevent an agency from giving less credit to an employee's
ratings of record from their previous agency than to the agency's
``own'' ratings. Several other commenters suggested that specific
mandates be established on how this flexibility is to be used.
OPM has carefully considered these suggestions and decided not to
adopt them. We believe that many of these concerns are rooted in
decisions about
[[Page 62496]]
using various types of performance appraisal programs in the first
place, and most would be addressed by the requirement to provide
uniformity and consistency within each competitive area. For example,
an agency assigning 16 years of credit to a ``fully successful'' rating
of record earned under a two-level program must give ALL employees who
earned a ``fully successful'' rating of record in a two-level program
this credit, no matter what agency or organization actually issued the
rating. Granting additional flexibility, by definition, allows for
decision-making that some may disagree with. Alternatively, an agency
is free to choose a crediting system that mirrors the current 12/16/20
year pattern required for use in single-rating-pattern situations (they
are required to examine the situation when multiple rating patterns
exist, but there is no requirement to adopt any particular crediting
method). In addition, agencies concerned about consistency are free to
establish their own agencywide policies on how this flexibility will be
used.
One commenter suggested that no additional credit beyond 12 years
be provided for performance above the level of ``Fully Successful''. We
have not adopted this suggestion since it goes beyond the scope of the
proposal and because the new regulations would give agencies the
flexibility to assign credit in this way if they choose, as long as
ratings of record are assigned under more than one summary pattern in
the competitive area.
Extending the ``look-back'' period to 6 years
This element of the proposal addressed the circumstance where
employees have received fewer than three actual ratings of record in
the last 4 years, which could occur due to a variety of circumstances.
Current regulations require the substitution of an assumed rating of
``Fully Successful'' for each missing rating of record. To minimize the
use of assumed ratings and to maximize the extent to which additional
retention service credit is based on actual job performance, OPM
proposed to lengthen the period of time from which ratings of record
are taken into account from 4 years to 6 years prior to the reduction
in force. This change would have been phased in to allow agencies time
to change their recordkeeping procedures.
Several of those who commented supported this proposal, believing
that the potential for increasing the use of actual performance
appraisals earned by employees outweighed the additional record-keeping
requirements it would impose on agencies. Some even suggested that we
modify the proposal to allow agencies to go back longer than 6 years
when necessary. However, the majority of commenters disagreed with the
proposed lengthening of the ``look-back'' period from 4 years to 6
years, even with the phase-in provisions. The objections centered on
the view that a 6-year-old appraisal is too dated to serve as an
accurate indicator of current employee performance, and that allowing
older appraisals to be used in reduction in force might discourage
supervisors from preparing current appraisals when required. Some were
also concerned that these additional administrative requirements were
unduly burdensome, especially in light of the current emphasis on
simplification, paperwork reduction, and streamlining. We have
considered these comments, as well as the possibility of providing
agencies with flexibility to determine what the length of their ``look-
back'' period should be for specific reductions in force. We concluded
that the significant additional administrative requirements resulting
from a 6-year ``look-back'' do not justify the results, especially
since the other changes provided for in this regulatory package would
significantly reduce the number of assumed ratings. For these reasons,
we concluded that the current ``look-back'' period of 4 years should be
retained.
Averaging actual ratings received if fewer than three
To further enhance the use of actual performance in determining
reduction in force service credit, OPM proposed to remove the
requirement to fill in missing ratings of record with assumed ``fully
successful'' ratings when an employee has received only one or two
actual ratings of record. Under the proposal, the actual rating(s) of
record available would serve as the sole basis of the employee's
credit, and no assumed ratings would be used. Consequently, if an
employee has received only two actual ratings of record during this
period, the value assigned to each rating would be added together and
divided by two to determine the amount of additional retention service
credit.
Among those who commented on this proposal, there was an almost
equal number of those who supported it and those who did not. Most of
those opposing the proposed change cited the greater weight that would
necessarily be placed on the one or two actual ratings of record
received. One commenter was concerned that supervisors would be less
likely to complete ratings of record as a result of this proposal. A
number of commenters, however, supported this proposal because it
simplifies the process and allows an employee's actual demonstrated
performance to take the place of an artificially prescribed level of
credit (assumed ``Fully Successful''). In considering the comments
received on this issue, we were persuaded that this change would serve
to simplify the procedure and would increase the emphasis on actual
performance, a stated goal of the proposed regulations. Therefore, we
are adopting this proposal in the final regulations.
Crediting performance for employees with no actual ratings
OPM had proposed two methods of providing performance credit for
reduction in force in cases where an employee would have no actual
ratings of record at all. Under the proposed regulations, an employee
with at least one year of current continuous service would be given the
additional retention service credit for the most common, or ``modal'',
summary rating level, as defined in 5 CFR 351.203, for the summary
level pattern that applies to the employee's position at the time of
the reduction in force. The proposal would allow agencies to determine
the modal rating using ratings of record in the competitive area, in a
larger subdivision of the agency, or agencywide, as long as the
applicable modal rating(s) was applied uniformly and consistently
within the competitive area to all employees with no ratings of record.
Under the proposal, the modal rating would not be used for
employees who have completed less than one year of current continuous
service. Instead, additional retention service credit would be given
based on a Level 3 (Fully Successful or equivalent) rating of record
under the summary level pattern that applies to the employee's position
at the time of reduction in force.
Those who commented negatively on this proposal disliked the idea
of using a modal rating because it did not represent performance
actually demonstrated by the employee. Some felt the use of a modal
rating was arbitrary and unfair, and potentially vulnerable to appeal
or other challenge, while others saw it as more fair to employees than
an assumed ``fully successful'' rating that now falls below the
Governmentwide average rating. Several agencies were also concerned
with how this requirement would be incorporated into existing automated
systems.
[[Page 62497]]
One commenter suggested that the regulations be revised to require
that all employees with at least one year of service must have a rating
of record before a reduction in force can be conducted. We have not
adopted this suggestion because we feel it is impossible to require a
rating of record in all circumstances, given the various rating cycle
dates and other circumstances that can occur.
One of those who commented suggested that employees who have
received no ratings of record should receive no performance credit for
reduction in force. We have not adopted this suggestion because we
believe it unfairly and severely penalizes an employee who has no
ratings of record due to factors completely outside his/her control. We
believe that some reasonable and fair method of constructing
performance credit is necessary to deal with these circumstances.
It is important to note that the modal rating would only be used in
cases where the employee has no ratings of record of his/her own to
credit. Since no rating of record exists, some form of ``assumed''
rating is the only recourse available. Because the modal rating is the
summary level that was given most often to employees in the
organization conducting the reduction in force, we believe it is the
best way to assign credit with the least disadvantage to an individual
employee who has no rating of record reflecting his/her actual
performance.
Much of the opposition to the modal rating proposal focused on the
complexity for personnelists in administering two different types of
formulae based on length of service (less than one year means use
assumed ``Fully Successful'; more than one year requires tabulation of
modal rating). Some saw this as contradictory to ongoing simplification
initiatives. In addition, several commenters pointed out that this
distinction could result in an employee with 364 days of service being
treated differently (in terms of performance credit for reduction in
force) than another employee with 366 days of service. We agree that
the distinction based on length of service adds greater complexity to
the process, and we have therefore eliminated this distinction in the
final regulations. Instead, the modal rating will be used to grant
performance credit in reduction in force for all employees who have no
ratings of record. We feel this better supports the principles of
uniformity and consistency in the reduction in force treatment of
employees.
Several commenters requested that OPM designate the basis used by
agencies to determine their modal ratings (i.e., agencywide; agency
subdivision; or competitive area). They also asked that agencies not be
allowed to change this basis once it is selected without OPM and/or
union approval. However, agencies have different data systems and not
all will have a great deal of flexibility in terms of tabulating modal
ratings. Some may only have agencywide performance appraisal data to
work with. We felt that it was necessary to preserve this flexibility
for determining the basis used for tabulating modal ratings to ensure
that all agencies are able to implement this requirement. However, we
would encourage agencies to consider making this determination in
partnership with employees and their representatives.
Use of Non-430 Ratings in Reduction in Force
OPM proposed language in the revised section 351.504 that would
require agencies to use all ratings of record given to employees for
assigning additional retention service credit during a reduction in
force, including a performance evaluation given to an employee under an
appraisal system not covered by the provisions of 5 CFR part 430,
subpart B, if it meets the conditions specified in the new paragraph
(c) of section 430.201.
Those who commented in support of this proposal felt it was
appropriate to give credit for such ratings in a reduction in force if
they were equivalent to those given under part 430.
One commenter disagreed with the proposal, believing it would be
too difficult for agencies to establish the equivalent summary pattern
and rating level for these non-430 ratings. We have considered this
objection; however, we feel that agencies should be able to make these
determinations with help from the agency that gave the rating and/or
members of OPM's performance management staff.
Implementation Date Issues
(1) Performance in Retention Service Credit Determinations
The new agency authority to determine retention service credit when
employees in a competitive area are rated under multiple rating
patterns described in Sec. 351.504(e) would apply only to ratings of
record that are put on record, as defined in paragraph (b)(3) of
Sec. 351.504, on or after October 1, 1997. The agency credits any
ratings of record put on record on or before September 30, 1997, based
on the Governmentwide 12-, 16-, and 20-year formula for additional
retention service credit currently in effect.
Agencies were divided on their preference for which ratings of
record could be assigned credit using the new flexibility. While some
wanted to be able to establish credit for ratings of record given since
1995 (when performance management was deregulated), others wished to
establish credit only for ratings of record given under cycles begun
after October 1, 1997. OPM originally proposed that the flexibility
would apply to ratings of record put on record on or after October 1,
1997, and has decided to retain this provision in the final regulation.
A related issue was the effective date of the regulations and its
effect on the implementation of some of the provisions, particularly
those affecting the flexible assignment of service credit and
situations where fewer than three ratings of record are available.
Concerns such as the lead time required for changes in the automation
of RIF processing programs, and the need to meet collective bargaining
requirements prior to the implementation of these regulations were also
raised during the comment process. OPM originally proposed
implementation on October 1, 1997. We have considered the suggestions
received on this issue and have determined that overall fairness is
best managed through giving agencies the flexibility to implement the
provisions of Sections 351.504 (crediting performance) and 351.803
(notice of eligibility for reemployment and other placement
assistance), at any time between the effective date of these
regulations and October 1, 1998. Agencies are required to apply the
provisions used in a uniform and consistent manner to all employees in
a given RIF competitive area.
When crediting performance in a reduction in force, agencies would
have the option to implement immediately as of the effective date of
these regulations the provisions for establishing credit when ratings
of record were given under mixed summary level patterns (351.504(e))
and the use of the modal value for missing ratings as well as averaging
only actual ratings of record found during the 4-year ``look-back''
period (351.504(c)). At its discretion, an agency could decide to delay
implementation of these provisions until no later than October 1, 1998,
and continue to use the performance crediting provisions in the current
Sec. 351.504 (i.e., those in effect on January 1, 1997).
[[Page 62498]]
The effect of the provisions in paragraphs 351.504 (b) and (d)
remain unchanged by the new regulations. When applying paragraph
351.504(a), the context created by the new definition for rating of
record and other regulatory changes will permit the use of non-430
ratings under the conditions specified even when an agency is using the
older version of 5 CFR 351.504.
This gives agencies able to proceed immediately the opportunity to
do so, without forcing others that need time to complete more extensive
preparations into an unrealistic time frame. However, for reduction in
force actions effective after September 30, 1998, the new provisions
for crediting mixed-pattern ratings of record and handling situations
where ratings are missing must be applied by all agencies.
(2) Implementation of Provisions During Ongoing Reductions
Several commenters mentioned their concern that ongoing reductions
in force would be disrupted by the requirement to implement these
provisions. Revising the procedures for handling missing ratings of
record and crediting performance under multiple rating patterns could
result in changed reduction in force outcomes, new notices, and
additional delays due to notice period requirements. We agree that this
would prove unnecessarily disruptive to both agencies and employees.
However, we believe that giving agencies the option to implement the
provisions of sections 351.504 and 351.803 at any time up until October
1, 1998, will allow them to take into account any upcoming reduction in
force activity and plan accordingly.
Technical Amendments
OPM proposed a number of technical changes in parts 351, 430 and
531, which served to clarify existing regulations in various areas.
These included redefinition of rating of record under part 351 to refer
to the part 430 definition, provisions for handling employees with a
written notice of pending action under part 752 similarly to those with
action pending under part 432, changes to the critical element
definition, barring non-critical elements in two-level appraisals, and
clarifications of: appraisal period, acceptable level of competence
determinations, competitive area, competitive level, procedures for
determining grade intervals for assignment, expiration and amendment of
reduction in force notices, assignment rights optionally provided to
excepted service employees, and coverage of term employees under
retention subgroups.
We received comments on some of these proposed clarifications. One
suggested rewording of the definition of rating of record to better
reflect that this rating belongs to the employee rather than the
agency. We agree and have adopted this suggestion.
Several commenters asked what date should be used as the effective
date of a rating of record. Perhaps contributing to their confusion are
changes to the way ratings of record are reported to the Central
Personnel Data File. While a rating of record is a personnel action,
OPM no longer requires that it be reported separately with its own
distinct nature of action code (009). Rating of record information is
now transmitted to OPM via other standard reporting procedures. When a
separate nature of action code was used, the previous reporting
procedures specified that the effective date for a rating of record was
the ending date of the appraisal period to which the rating applied.
The new procedures capture this same information as an isolated data
element and eliminate the need for separate processing of many
thousands of actions. It is OPM's view that the ending date of the
applicable appraisal period is the effective date of the rating of
record, and this date should be used to determine whether or not a
rating of record falls within the 4-year ``look-back'' period.
Section 5 CFR 351.402(b) clarifies OPM's longstanding policy on the
minimum standard for a reduction in force competitive area. All of the
comments on this proposed revision supported the change, and the
proposed regulation is adopted without further modification.
To conduct a reduction in force, section 5 CFR 351.402(a) provides
that the agency must establish the applicable competitive area that is
the boundary within which employees compete for retention under
reduction in force procedures.
Section 5 CFR 351.402(b) provides that employees in a competitive
area compete for retention under OPM's reduction in force regulations
only with other employees in the same competitive area. Employees do
not compete for retention with employees of the agency in another
competitive area.
Section 5 CFR 351.402(b) provides that the agency must define each
competitive area solely in terms of organizational unit and
geographical location. The competitive area then includes all employees
within the organizational unit and geographical location that is
included in the competitive area definition. Each employee competes
with all other employees in the competitive area for positions under
OPM's retention regulations. There is no minimum or maximum number of
employees in a competitive area. Also, in any one reduction in force,
an agency may not use one competitive area for the first round of
competition and a different competitive area for second rounds of
competition.
Section 5 CFR 351.402(b) clarifies that the minimum competitive
area for any agency component is a subdivision of the agency within the
local commuting area that is under separate administration. An agency
may establish separate competitive areas for different components in
the same local commuting area if each component is under separate
administration, which includes that each is independent of the other in
operation, work function, and staff.
As used for purposes of establishing a minimum competitive area
consistent with section 5 CFR 351.402(b), ``separate administration''
is the administrative authority to take or direct personnel actions
(i.e., the authority to establish positions, abolish positions, assign
duties, etc.) rather than the issuance or processing of the documents
by which these decisions are effected. This separate administration is
evidenced by the agency's organizational manual and delegations of
authority that document where, in the organization, final authority
rests to make these decisions. (The competitive area standard also
recognizes that many agencies retain certain personnel-related actions
such as classification authority or final approval of higher-graded
positions to a central authority above the organizational standard
required for a minimum competitive area).
The same standard is used for a minimum competitive area in a local
commuting area in both a headquarters organization or field component.
Former references in 5 CFR 351.402(b) to organizational units that
could comprise a minimum competitive area in a headquarters
organization or field component were examples of where separate
administration is often found in agencies. These references were
deleted in final 5 CFR 351.402(b) to clarify that the same minimum
competitive area standard is applicable whether the organizational unit
is headquarters, a field activity, a duty station, or other applicable
organization.
Under 5 CFR 351.402(b), an agency may establish a competitive area
that is larger than the minimum standard. However, a competitive area
may not be smaller than the minimum standard.
[[Page 62499]]
The fact that several activities may be serviced by the same
personnel office does not, of itself, require that they be placed in
the same competitive area. The personnel office merely processes
personnel actions rather than having final responsibility to make
decisions on whether to establish positions, abolish positions, assign
duties, etc.
Another commenter felt that the proposal did not go far enough in
dealing with employees who have received written decisions under part
752, and suggested that those employees be excluded from reduction in
force competition altogether. There is, however, no basis in law to
eliminate the right of these employees to remain in reduction in force
competition until they are actually removed from Federal service.
Therefore, this suggestion was not adopted.
OPM had also proposed changes to the requirements for reduction in
force separation notices to include an estimate of severance pay if
applicable, and information on benefits available under new subparts F
and G (Career Transition Assistance Programs) of part 330 of this
chapter and from the applicable State dislocated worker unit(s), as
designated or created under title III of the Job Training Partnership
Act. To increase placement opportunities for employees affected by
downsizing, the proposed section also required that agencies give
employees receiving a reduction in force separation notice a release to
authorize, at their option, the release of their resumes for employment
referral to State dislocated worker unit(s) and potential public and
private sector employers. OPM is developing material for this purpose.
A few commenters were concerned that these requirements would place
a greater burden on personnel offices and reduce the emphasis on
employee empowerment that is central to successful career transition
programs. One felt the role of obtaining authorization for release of
resumes belonged solely with the placement coordinator, and that this
did not belong with the reduction in force notice since placement
efforts would already be well underway by the time reduction in force
notices are issued.
We agree that, ideally, placement efforts should begin long before
reduction in force notices are issued. However, this is not always
possible. We have considered these comments carefully and feel that
providing a release that can be completed entirely at the employee's
option remains within the spirit of empowerment and simply serves as
another vehicle for coordination between Federal Government and other
public and private employers that will hopefully aid employees in the
transition process. Many agencies have personnel office staff who serve
in dual roles, both conducting the reduction in force and assisting
employees in placement. Since a reduction in force notice is issued to
all employees being separated, it provides a unique opportunity for the
agency to give employees career transition information and to ensure
that all employees being separated will receive it. However, in
recognition of the fact that agencies will need time to modify their
reduction in force notices, we have made this provision one of those
which may be implemented at any time between the effective date of
these regulations and October 1, 1998. All notices issued on or after
October 1, 1998, must meet the requirements of these regulations.
One commenter was concerned that the severance pay estimate
calculation might be open to challenge if it was later found to be in
error. They suggested instead that agencies provide information on how
to compute severance pay and let employees do the calculations
themselves. We have not adopted this suggestion because we believe
agency-developed severance pay estimates are much more likely to be
accurate than those done by employees. Further, we would emphasize that
agencies should clearly indicate that their severance pay calculations
are merely estimates, as many agencies do now, but that employees are
ultimately responsible for verifying these estimates.
Several commenters suggested that we add a requirement that
specific information on the employee's competitive level, including the
names of employees in various levels, be added to the notice.
Information of this type is normally discussed during reduction in
force counseling sessions between affected employees and knowledgeable
personnel specialists. Releasing this type of information in a
reduction in force notice has serious privacy implications and would
not be useful in isolation, nor would it serve to help the employee
better understand his/her reduction in force rights without counseling.
Therefore, we have not adopted this suggestion.
Another commenter questioned the restriction in the definition of
critical elements to individual performance only, especially in light
of the workplace trends toward team performance. We do not disagree
with the observation that team work is becoming more prevalent in the
workplace and should be captured when measuring performance. In
recognition of the importance of team work in many organizations, the
performance management regulations specifically provide for the use of
non-critical elements that can address performance measured at the team
level and that impact the summary level, which can be particularly
useful in making performance distinctions above the Fully Successful
(or equivalent) level. In addition, the regulations permit the use of
critical elements to measure the individual's contribution to the
team's success or failure. However, it would be inappropriate to allow
a single team failure (i.e., failed team critical element) to result
automatically in every individual on the team being designated as
Unacceptable when some of the individual performance within the team is
probably Fully Successful or better.
Critical elements are the cornerstone of individual accountability
in employee performance. Therefore, they should not be used to measure
performance over which the employee is not intended or expected to
exercise individual control or authority. In addition, there is the
prohibition that non-critical elements cannot be used with a two-level
summary pattern (i.e., pass/fail). Organizations that summarize
performance at only two levels can choose to incorporate additional
performance elements to identify and measure team accomplishments. We,
therefore, made no change to this proposal.
One commenter suggested that a within-grade increase following a
delay, based on the circumstances stated in the regulations and a
subsequent rating of record of Level 3 or higher, should be paid
retroactively. Because no change was, or is, proposed to the current
language at 5 CFR 531.409(c)(2)(iii) that addresses a retroactive
within-grade increase following a delay in the acceptable level of
competence determination, that paragraph had not appeared in the
proposed regulations as printed in the Federal Register. Because that
current language will remain in effect, the commenter's concern is
already accommodated.
One commenter suggested that within-grade delay procedures should
be incorporated into agency performance management plans and, thereby,
be subject to OPM review and approval. Within-grade delay is prescribed
by regulation because it is a procedure where Governmentwide
consistency is appropriate. There is no value added to having OPM
review agency procedures implementing such uniform regulations.
Furthermore, the Performance Management Plan alluded
[[Page 62500]]
to is no longer required because, in part, the 1995 revision was
designed to eliminate needless repetition of regulatory language.
Therefore, this suggestion was not adopted.
Several other suggestions for minor wording changes to provide
greater clarification were adopted where we felt they were warranted.
Most of the requests for clarification or additional discussion would
be more appropriately handled through individual discussions between
OPM staff and agency personnelists, which we are happy to provide upon
request. In addition, some comments were provided that addressed
reduction in force and performance management issues that were outside
the scope of these proposed regulations, such as changing the way
performance is used relative to the other reduction in force factors;
these suggestions were not adopted since they were not pertinent to the
specific proposals made in these regulations. Suggestions for wording
changes to 5 CFR part 293 were not adopted because we felt there was no
basis for issuing revised regulations in this area as long as we were
eliminating the proposal to lengthen the ``look-back'' period for
ratings of record.
To the extent practicable, these regulations should be implemented
by agencies in partnership with management and employees' union
representatives.
Regulatory Flexibility Act
I certify that this regulation will not have a significant economic
impact on a substantial number of small entities because it only
affects Federal employees.
Executive Order 12866, Regulatory Review
This rule has been reviewed by the Office of Management and Budget
in accordance with Executive Order 12866.
List of Subjects
5 CFR Part 351
Administrative practice and procedure, Government employees.
5 CFR Part 430
Decorations, medals, awards, Government employees.
5 CFR Part 531
Government employees, Law enforcement officers, Wages.
Office of Personnel Management.
Janice R. Lachance,
Acting Director.
Accordingly, OPM is amending parts 351, 430, and 531 of title 5,
Code of Federal Regulations, as follows:
PART 351--REDUCTION IN FORCE
4. The authority citation for part 351 continues to read as
follows:
Authority: 5 U.S.C. 1302, 3502, 3503.
5. In Sec. 351.203, the definition of ``Annual Performance rating
of record'' is removed, and the definitions of Current rating of
record, Modal rating, and Rating of record are added in alphabetical
order, to read as follows:
Sec. 351.203 Definitions.
* * * * *
Current rating of record is the rating of record for the most
recently completed appraisal period as provided in Sec. 351.504(b)(3).
* * * * *
Modal rating is the summary rating level assigned most frequently
among the actual ratings of record that are:
(1) Assigned under the summary level pattern that applies to the
employee's position of record on the date of the reduction in force;
(2) Given within the same competitive area, or at the agency's
option within a larger subdivision of the agency or agencywide; and
(3) On record for the most recently completed appraisal period
prior to the date of issuance of reduction in force notices or the
cutoff date the agency specifies prior to the issuance of reduction in
force notices after which no new ratings will be put on record.
Rating of record has the meaning given that term in Sec. 430.203 of
this chapter. For an employee not subject to 5 U.S.C. Chapter 43, or
part 430 of this chapter, it means the officially designated
performance rating, as provided for in the agency's appraisal system,
that is considered to be an equivalent rating of record under the
provisions of Sec. 430.201(c) of this chapter.
* * * * *
7. In Sec. 351.402, paragraph (b) is revised to read as follows:
Sec. 351.402 Competitive area.
* * * * *
(b) A competitive area must be defined solely in terms of the
agency's organizational unit(s) and geographical location, and it must
include all employees within the competitive area so defined. A
competitive area may consist of all or part of an agency. The minimum
competitive area is a subdivision of the agency under separate
administration within the local commuting area.
* * * * *
8. In Sec. 351.403, paragraph (c) is added to read as follows:
Sec. 351.403 Competitive level.
* * * * *
(c) An agency may not establish a competitive level based solely
upon:
(1) A difference in the number of hours or weeks scheduled to be
worked by other-than-full-time employees who would otherwise be in the
same competitive level;
(2) A requirement to work changing shifts;
(3) The grade promotion potential of the position; or
(4) A difference in the local wage areas in which wage grade
positions are located.
9. In Sec. 351.404, paragraph (a) introductory text, and paragraph
(b)(2), are revised to read as follows:
Sec. 351.404 Retention register.
(a) When a competing employee is to be released from a competitive
level under this part, the agency shall establish a separate retention
register for that competitive level. The retention register is prepared
from the current retention records of employees. Upon displacing
another employee under this part, an employee retains the same status
and tenure in the new position. Except for an employee on military duty
with a restoration right, the agency shall enter on the retention
register, in the order of retention standing, the name of each
competing employee who is:
* * * * *
(b) * * *
(2) The agency shall list, at the bottom of the list prepared under
paragraph (b)(1) of this section, the name of each employee in the
competitive level with a written decision of removal under part 432 or
752 of this chapter.
10. Section 351.405 is revised to read as follows:
Sec. 351.405 Demoted employees.
An employee who has received a written decision under part 432 or
752 of this chapter to demote him or her competes under this part from
the position to which he or she will be or has been demoted.
11. In Sec. 351.501, paragraph (b)(3) is revised to read as
follows:
Sec. 351.501 Order of retention--competitive service.
* * * * *
(b) * * *
(3) Group III includes all employees serving under indefinite
appointments, temporary appointments pending establishment of a
register, status quo appointments, term appointments, and
[[Page 62501]]
any other nonstatus nontemporary appointments which meet the definition
of provisional appointments contained in Secs. 316.401 and 316.403 of
this chapter.
* * * * *
12. Section 351.504 is revised to read as follows:
Sec. 351.504 Credit for performance.
Note to Sec. 351.504: Compliance dates: Subject to the
requirements of 5 U.S.C. Section 7116(a)(7), agencies may implement
revised Sec. 351.504 at any time between December 24, 1997 and
October 1, 1998. For reduction in force actions effective between
December 24, 1997 and September 30, 1998, agencies may use either
Sec. 351.504 effective December 24, 1997, or the prior Sec. 351.504
in 5 CFR part 351 (January 1, 1997 edition).
(a) Ratings used. (1) Only ratings of record as defined in
Sec. 351.203 shall be used as the basis for granting additional
retention service credit in a reduction in force.
(2) For employees who received ratings of record while covered by
part 430, subpart B, of this chapter, those ratings of record shall be
used to grant additional retention service credit in a reduction in
force.
(3) For employees who received performance ratings while not
covered by the provisions of 5 U.S.C. Chapter 43 and part 430, subpart
B, of this chapter, those performance ratings shall be considered
ratings of record for granting additional retention service credit in a
reduction in force only when it is determined that those performance
ratings are equivalent ratings of record under the provisions of
Sec. 430.201(c) of this chapter. The agency conducting the reduction in
force shall make that determination.
(b)(1) An employee's entitlement to additional retention service
credit for performance under this subpart shall be based on the
employee's three most recent ratings of record received during the 4-
year period prior to the date of issuance of reduction in force
notices, except as otherwise provided in paragraphs (b)(2) and (c) of
this section.
(2) To provide adequate time to determine employee retention
standing, an agency may provide for a cutoff date, a specified number
of days prior to the issuance of reduction in force notices after which
no new ratings of record will be put on record and used for purposes of
this subpart. When a cutoff date is used, an employee will receive
performance credit for the three most recent ratings of record received
during the 4-year period prior to the cutoff date.
(3) To be creditable for purposes of this subpart, a rating of
record must have been issued to the employee, with all appropriate
reviews and signatures, and must also be on record (i.e., the rating of
record is available for use by the office responsible for establishing
retention registers).
(4) The awarding of additional retention service credit based on
performance for purposes of this subpart must be uniformly and
consistently applied within a competitive area, and must be consistent
with the agency's appropriate issuance(s) that implement these
policies. Each agency must specify in its appropriate issuance(s):
(i) The conditions under which a rating of record is considered to
have been received for purposes of determining whether it is within the
4-year period prior to either the date the agency issues reduction in
force notices or the agency-established cutoff date for ratings of
record, as appropriate; and
(ii) If the agency elects to use a cutoff date, the number of days
prior to the issuance of reduction in force notices after which no new
ratings of record will be put on record and used for purposes of this
subpart.
(c) Missing ratings. Additional retention service credit for
employees who do not have three actual ratings of record during the 4-
year period prior to the date of issuance of reduction in force notices
or the 4-year period prior to the agency-established cutoff date for
ratings of record permitted in paragraph (b)(2) of this section shall
be determined under paragraphs (d) or (e) of this section, as
appropriate, and as follows:
(1) An employee who has not received any rating of record during
the 4-year period shall receive credit for performance based on the
modal rating for the summary level pattern that applies to the
employee's official position of record at the time of the reduction in
force.
(2) An employee who has received at least one but fewer than three
previous ratings of record during the 4-year period shall receive
credit for performance on the basis of the value of the actual
rating(s) of record divided by the number of actual ratings received.
If an employee has received only two actual ratings of record during
the period, the value of the ratings is added together and divided by
two (and rounded in the case of a fraction to the next higher whole
number) to determine the amount of additional retention service credit.
If an employee has received only one actual rating of record during the
period, its value is the amount of additional retention service credit
provided.
(d) Single rating pattern. If all employees in a reduction in force
competitive area have received ratings of record under a single pattern
of summary levels as set forth in Sec. 430.208(d) of this chapter, the
additional retention service credit provided to employees shall be
expressed in additional years of service and shall consist of the
mathematical average (rounded in the case of a fraction to the next
higher whole number) of the employee's applicable ratings of record,
under paragraphs (b)(1) and (c) of this section computed on the
following basis:
(1) Twenty additional years of service for each rating of record
with a Level 5 (Outstanding or equivalent) summary;
(2) Sixteen additional years of service for each rating of record
with a Level 4 summary; and
(3) Twelve additional years of service for each rating of record
with a Level 3 (Fully Successful or equivalent) summary.
(e) Multiple rating patterns. If an agency has employees in a
competitive area who have ratings of record under more than one pattern
of summary levels, as set forth in Sec. 430.208(d) of this chapter, it
shall consider the mix of patterns and provide additional retention
service credit for performance to employees expressed in additional
years of service in accordance with the following:
(1) Additional years of service shall consist of the mathematical
average (rounded in the case of a fraction to the next higher whole
number) of the additional retention service credit that the agency
established for the summary levels of the employee's applicable
rating(s) of record.
(2) The agency shall establish the amount of additional retention
service credit provided for summary levels only in full years; the
agency shall not establish additional retention service credit for
summary levels below Level 3 (Fully Successful or equivalent).
(3) When establishing additional retention service credit for the
summary levels at Level 3 (Fully Successful or equivalent) and above,
the agency shall establish at least 12 years, and no more than 20
years, additional retention service credit for a summary level.
(4) The agency may establish the same number of years additional
retention service credit for more than one summary level.
(5) The agency shall establish the same number of years additional
retention service credit for all ratings of record with the same
summary level in the same pattern of summary levels as set forth in
Sec. 430.208(d) of this chapter.
[[Page 62502]]
(6) The agency may establish a different number of years additional
retention service credit for the same summary level in different
patterns.
(7) In implementing paragraph (e) of this section, the agency shall
specify the number(s) of years additional retention service credit that
it will establish for summary levels. This information shall be made
readily available for review.
(8) The agency may apply paragraph (e) of this section only to
ratings of record put on record on or after October 1, 1997. The agency
shall establish the additional retention service credit for ratings of
record put on record prior to that date in accordance with paragraph
(d) of this section.
13. In Sec. 351.602, paragraph (c) is revised to read as follows:
Sec. 351.602 Prohibitions.
* * * * *
(c) A written decision under part 432 or 752 of this chapter of
removal or demotion from the competitive level.
14. In Sec. 351.701, paragraph (f) is added to read as follows:
Sec. 351.701 Assignment involving displacement.
* * * * *
(f)(1) In determining applicable grades (or grade intervals) under
Secs. 351.701(b)(2) and 351.701(c)(2), the agency uses the grade
progression of the released employee's position of record to determine
the grade (or interval) limits of the employee's assignment rights.
(2) For positions covered by the General Schedule, the agency must
determine whether a one-grade, two-grade, or mixed grade interval
progression is applicable to the position of the released employee.
(3) For positions not covered by the General Schedule, the agency
must determine the normal line of progression for each occupational
series and grade level to determine the grade (or interval) limits of
the released employee's assignment rights. If the agency determines
that there is no normal line of progression for an occupational series
and grade level, the agency provides the released employee with
assignment rights to positions within three actual grades lower on a
one-grade basis. The normal line of progression may include positions
in different pay systems.
(4) For positions where no grade structure exists, the agency
determines a line of progression for each occupation and pay rate, and
provides assignment rights to positions within three grades (or
intervals) lower on that basis.
(5) If the released employee holds a position that is less than
three grades above the lowest grade in the applicable classification
system (e.g., the employee holds a GS-2 position), the agency provides
the released employee with assignment rights up to three actual grades
lower on a one-grade basis in other pay systems.
15. In Sec. 351.705, paragraph (a)(3) is revised to read as
follows:
Sec. 351.705 Administrative assignment.
(a) * * *
(3) Provide competing employees in the excepted service with
assignment rights to other positions under the same appointing
authority on the same basis as assignment rights provided to
competitive service employees under Sec. 351.701 and in paragraphs (a)
(1) and (2) of this section.
* * * * *
16. In Sec. 351.802, paragraph (a)(2) is revised to read as
follows:
Sec. 351.802 Content of notice.
(a) * * *
(2) The employee's competitive area, competitive level, subgroup,
service date, and three most recent ratings of record received during
the last 4 years.
* * * * *
17. In Sec. 351.803, paragraph (a) is revised to read as follows:
Sec. 351.803 Notice of eligibility for reemployment and other
placement assistance.
(a) An employee who receives a specific notice of separation under
this part must be given information concerning the right to
reemployment consideration and career transition assistance under
subparts B (Reemployment Priority List), F and G (Career Transition
Assistance Programs) of part 330 of this chapter. The employee must
also be given a release to authorize, at his or her option, the release
of his or her resume and other relevant employment information for
employment referral to State dislocated worker unit(s) and potential
public or private sector employers. The employee must also be given
information concerning how to apply both for unemployment insurance
through the appropriate State program and benefits available under the
State dislocated worker unit(s), as designated or created under title
III of the Job Training Partnership Act, and an estimate of severance
pay (if eligible).
Note to Sec. 351.803(a): Compliance dates: Subject to the
requirements of 5 U.S.C. 7116(a)(7), agencies may implement revised
Sec. 351.803(a) at any time between December 24, 1997 and October 1,
1998. For reduction in force actions effective between December 24,
1997 and September 30, 1998, agencies may use either Sec. 351.803(a)
effective December 24, 1997, or the prior Sec. 351.803(a) in 5 CFR
part 351 (January 1, 1997 edition).
* * * * *
18. Section 351.804 is revised to read as follows:
Sec. 351.804 Expiration of notice.
(a) A notice expires when followed by the action specified, or by
an action less severe than specified, in the notice or in an amendment
made to the notice before the agency takes the action.
(b) An agency may not take the action before the effective date in
the notice; instead, the agency may cancel the reduction in force
notice and issue a new notice subject to this subpart.
19. Section 351.805 is revised to read as follows:
Sec. 351.805 New notice required.
(a) An employee is entitled to a written notice of, as appropriate,
at least 60 or 120 full days if the agency decides to take an action
more severe than first specified.
(b) An agency must give an employee an amended written notice if
the reduction in force is changed to a later date. A reduction in force
action taken after the date specified in the notice given to the
employee is not invalid for that reason, except when it is challenged
by a higher-standing employee in the competitive level who is reached
out of order for a reduction in force action as a result of the change
in dates.
(c) An agency must give an employee an amended written notice and
allow the employee to decide whether to accept a better offer of
assignment under subpart G of this part that becomes available before
or on the effective date of the reduction in force. The agency must
give the employee the amended notice regardless of whether the employee
has accepted or rejected a previous offer of assignment, provided that
the employee has not voluntarily separated from his or her official
position.
PART 430--PERFORMANCE MANAGEMENT
20. The authority citation for part 430 continues to read as
follows:
Authority: 5 U.S.C. chapter 43.
21. In Sec. 430.201, paragraph (c) is added to read as follows:
Sec. 430.201 General.
* * * * *
(c) Equivalent ratings of record. (1) If an agency has
administratively adopted and applied the procedures of this
[[Page 62503]]
subpart to evaluate the performance of its employees, the ratings of
record resulting from that evaluation are considered ratings of record
for reduction in force purposes.
(2) Other performance evaluations given while an employee is not
covered by the provisions of this subpart are considered ratings of
record for reduction in force purposes when the performance
evaluation--
(i) Was issued as an officially designated evaluation under the
employing agency's performance evaluation system,
(ii) Was derived from the appraisal of performance against
expectations that are established and communicated in advance and are
work related, and
(iii) Identified whether the employee performed acceptably.
(3) When the performance evaluation does not include a summary
level designator and pattern comparable to those established at
Sec. 430.208(d), the agency may identify a level and pattern based on
information related to the appraisal process.
22. In Sec. 430.203, the definitions of Critical element,
Performance rating, and Rating of record are revised to read as
follows:
Sec. 430.203 Definitions.
* * * * *
Critical element means a work assignment or responsibility of such
importance that unacceptable performance on the element would result in
a determination that an employee's overall performance is unacceptable.
Such elements shall be used to measure performance only at the
individual level.
* * * * *
Performance rating means the written, or otherwise recorded,
appraisal of performance compared to the performance standard(s) for
each critical and non-critical element on which there has been an
opportunity to perform for the minimum period. A performance rating may
include the assignment of a summary level within a pattern (as
specified in Sec. 430.208(d)).
* * * * *
Rating of record means the performance rating prepared at the end
of an appraisal period for performance of agency-assigned duties over
the entire period and the assignment of a summary level within a
pattern (as specified in Sec. 430.208(d)), or (2) in accordance with
Sec. 531.404(a)(1) of this chapter. These constitute official ratings
of record referenced in this chapter.
23. In Sec. 430.206, paragraphs (a)(2) and (b)(4) are revised,
paragraphs (b)(6) and (b)(7) are redesignated as paragraphs (b)(7) and
(b)(8) respectively, and a new paragraph (b)(6) is added to read as
follows:
Sec. 430.206 Planning performance.
(a) * * *
(2) Each program shall specify a single length of time as its
appraisal period. The appraisal period generally shall be 12 months so
that employees are provided a rating of record on an annual basis. A
program's appraisal period may be longer when work assignments and
responsibilities so warrant or performance management objectives can be
achieved more effectively.
(b) * * *
(4) Each performance plan shall include all elements which are used
in deriving and assigning a summary level, including at least one
critical element and any non-critical element(s).
* * * * *
(6) A performance plan established under an appraisal program that
uses only two summary levels (pattern A as specified in
Sec. 430.208(d)(1)) shall not include non-critical elements.
* * * * *
24. In Sec. 430.208, the introductory text to paragraph (d)(2) is
revised, paragraph (d)(4) is revised, and a new paragraph (d)(5) is
added to read as follows:
Sec. 430.208 Rating performance.
* * * * *
(d) * * *
(2) Within any of the patterns shown in paragraph (d)(1) of this
section, summary levels shall comply with the following requirements:
* * * * *
(4) The designation of a summary level and its pattern shall be
used to provide consistency in describing ratings of record and as a
reference point for applying other related regulations, including, but
not limited to, assigning additional retention service credit under
Sec. 351.504 of this chapter.
(5) Under the provisions of Sec. 351.504(e) of this chapter, the
number of years of additional retention service credit established for
a summary level of a rating of record shall be applied in a uniform and
consistent manner within a competitive area in any given reduction in
force, but the number of years may vary:
(i) In different reductions in force;
(ii) In different competitive areas; and
(iii) In different summary level patterns within the same
competitive area.
* * * * *
PART 531--PAY UNDER THE GENERAL SCHEDULE
25. The authority citation for part 531 continues to read as
follows:
Authority: 5 U.S.C. 5115, 5307, and 5338; sec. 4 of Pub. L. 103-
89, 107 Stat. 981; and E.O. 12748, 56 FR 4521, 3 CFR, 1991 Comp., p.
316;
Subpart B also issued under 5 U.S.C. 5303(g), 5333, 5334(a), and
7701(b)(2);
Subpart C also issued under 5 U.S.C. 5304, 5305, and 5553;
sections 302 and 404 of FEPCA, Pub. L. 101-509, 104 Stat. 1462 and
1466; and section 3(7) of Pub. L. 102-378, 106 Stat. 1356;
Subpart D also issued under 5 U.S.C. 5335(g) and 7701(b)(2);
Subpart E also issued under 5 U.S.C. 5336;
Subpart F also issued under 5 U.S.C. 5304, 5305(g)(1), and 5553;
and E.O. 12883, 58 FR 63281, 3 CFR, 1993 Comp., p. 682;
Subpart G also issued under 5 U.S.C. 5304, 5305, and 5553;
section 302 of the Federal Employees Pay Comparability Act of 1990
(FEPCA), Pub. L. 101-509, 104 Stat. 1462; and E.O. 12786, 56 FR
67453, 3 CFR, 1991 Comp., p. 376.
26. In Sec. 531.409, paragraphs (c)(1), (c)(2)(i), and (c)(2)(ii)
are revised to read as follows:
Sec. 531.409 Acceptable level of competence determinations.
* * * * *
(c) Delay in determination. (1) An acceptable level of competence
determination shall be delayed when, and only when, either of the
following applies:
(i) An employee has not had the minimum period of time established
at Sec. 430.207(a) of this chapter to demonstrate acceptable
performance because he or she has not been informed of the specific
requirements for performance at an acceptable level of competence in
his or her current position, and the employee has not been given a
performance rating in any position within the minimum period of time
(as established at Sec. 430.207(a) of this chapter) before the end of
the waiting period; or
(ii) An employee is reduced in grade because of unacceptable
performance to a position in which he or she is eligible for a within-
grade increase or will become eligible within the minimum period as
established at Sec. 430.207(a) of this chapter.
(2) * * *
(i) The employee shall be informed that his or her determination is
postponed and the appraisal period extended and shall be told of the
specific requirements for performance at an acceptable level of
competence.
(ii) An acceptable level of competence determination shall then be
made based on the employee's rating of record
[[Page 62504]]
completed at the end of the extended appraisal period.
* * * * *
[FR Doc. 97-30428 Filed 11-21-97; 8:45 am]
BILLING CODE 6325-01-U
